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CANNABIS. New Amsterdam Cafe owner Todd Bolli checks his inventory as he stands behind the counter of his retail shop June 20, 2018 in Vancouver, British Columbia, Canada. Canadian Prime Minister Justin Trudeau has announced recreational pot will be legal as of October 17 in Canada. Photo by Jeff Vinnick/Getty Images/AFP

Cannabis has been banned since 1923 in Canada, which legalized its therapeutic uses in 2001.

Under the new legislation, adults – either 18 or 19, depending on the province or territory – can legally buy, grow and consume cannabis in limited amounts.

Each Canadian household will be allowed to grow up to 4 plants at home, and one person may carry up to 30 grams (one ounce) of the drug in public.

Just prior to the announcement, the country's leading cannabis producers reported a surge in stocks – with market leader Canopy Grown jumping 1.7% to Can$43.27 ($32.51 US) – following the Senate vote to legalize the soft drug.

'Don't drive high'

Health Minister Ginette Petitpas Taylor said she was "so proud" of the move.

"This historic legislation will end prohibition and replace it with a sensible, responsible and equitable cannabis policy," she tweeted.

Public Safety Minister Ralph Goodale warned that driving while under the influence of cannabis or other drugs – or taking cannabis into or out of Canada – will remain illegal.

"Drug-impaired driving is extremely dangerous and can ruin your life in a heartbeat – don't drive high," he added.

Trudeau, who in 2013 said he had smoked a joint with friends "5 or 6 times," justified legalization on the grounds that it would take traffickers out of the equation and protect young people.

In an interview with Agence France-Presse last month, Trudeau said the world was closely following Canada's plans and predicted several nations would follow suit.

"There is a lot of interest from our allies in what we're doing," he said.

"They recognize that Canada is being daring... and recognize that the current regime (of prohibition) does not work, that it's not preventing young people from having easy access to cannabis."

The government will gain revenue from a market whose estimated value is Can$6-7 billion.

For each gram of cannabis sold at or below $10, a Can$1 excise tax will be imposed, and distributed between the federal government (receiving a quarter of the funds) and the provinces.

Federal and provincial consumption taxes will also apply – varying between 10% to 15% depending on the province.

Finance Minister Bill Morneau has estimated Can$400 million in fiscal revenue, with a goal to keep prices low in order to end the black market for the drug. – Rappler.com

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Welcome to Rappler, a social news network where stories inspire community engagement and digitally fuelled actions for social change. Rappler comes from the root words "rap" (to discuss) + "ripple" (to make waves).